In this Corporate Real Estate Journal article, Ingrid Fenn and Michele Flynn of SIREAS team up with Kate Vitasek, a faculty member for Graduate and Executive Education at the University of Tennessee’s Haslam College of Business Administration.
Modern outsourcing is more than a typical make/buy decision. Rather, there is a wide range of sourcing business models from which today’s practitioners can choose. Unfortunately, the fundamental nature of how goods and services are procured is not keeping pace with best practices of tapping into more mature sourcing business models; many business professionals wrongly assume that a transaction-based business model is the only way to craft a supplier contract. This paper provides an easy-to-understand framework for classifying the various contracting approaches along the sourcing continuum.
A key goal of the paper is to help organizations to not just understand the various models, but also to learn when to use each model. The paper suggests a straightforward business model mapping approach that organizations can use to choose the most appropriate sourcing business model for their situation.